The Minnesota congressman leading the charge to repeal a medical device excise tax that is meant to generate a big chunk of funding for the health care reform law has taken the most campaign money–more than $64,000–from medical device manufacturers this election cycle.
Rep. Erik Paulsen, R-Minn., has attracted 240 cosponsors, including 11 Democrats, for his bill to repeal the 2.3 percent excise tax, which the House is scheduled to consider this week. Paulsen hails from a state where the medical device industry is a substantial employer. Companies such as Medtronic, St. Jude Medical, and Starkey Laboratories have offices or are headquartered there and also figure among his campaign contributors, according to a search of campaign finance records via Influence Explorer.
Medical device manufacturers are up in arms over the excise tax, which is estimated would raise $29 billion to help fund implementation of the health care reform law. The legislation is widely seen as an election-year statement for Republicans to show they are pro-jobs and anti-tax. It is expected to die quickly in the Senate.
AdvaMed, the leading trade associations for the industry, has applauded the legislation and Rep. Paulsen's efforts, as has the Medical Device Manufacturers Association. They, along with a long list of companies and associations, have reported lobbying on the bill, and in some cases have hired outside lobbyists to plead their cases.
The lobbying firm Tarplin, Downs, & Young, for example, was hired by a trio of organizations–AdvaMed, Boston Scientific Corp., and the National Electronic Manufacturers Association, to lobby on the bill, according to the Center for Responsive Politics. One of the firm's lobbyists, Jennifer Young, contributed a total of $1,500 to Paulsen last year after the bill was introduced, her first contributions to the congressman.
Paulsen's take so far this election cycle from the industry is more than double what he raised in his first race for Congress in 2008, which was nearly $26,000. Overall, since then, he's collected more than $121,000.The congressman has hailed the legislation as a job-saving measure, meant to keep companies from laying off workers or "worse yet, close their doors altogether."
The Center for Budget and Policy Priorities, a liberal think tank, claims otherwise, arguing the tax will have no appreciable effect on the industry.
The proposal puts some Democrats who hail from technology-focused states in a quandry. Minnesota's Democratic senators, Amy Klobuchar and Al Franken, have both said they support a repeal of the tax (indeed Franken brags on his website that he was responsible for cutting the original tax proposal in half) as has Massachusetts Senate candidate Elizabeth Warren, although the Democrats raise questions about how to pay for the repeal.
A search on Influence Explorer shows that Sen. Klobuchar has taken more than $104,000 in campaign contributions from medical device manufacturers since the 2008 election cycle; Franken, $25,000, and Warren, $1,350.
In the months leading up to the passage of the health care reform law, there was a good deal of jockeying about the tax. At the time, St. Jude Medical left AdvaMed in a huff, upset that the trade association was supporting a multi-tiered approach to the tax, with manufacturers marketing more complex devices bearing a larger portion of the cost. The final version of the law adopted the 2.3 percent excise tax, while excluding devices such as hearing aids and eyeglasses that typically are purchased directly by a consumer.
(Technical note: Medical device manufacturers are designated by the "contributor category" of H4100 under the industry "pharmaceuticals/health products," as coded by the Center for Responsive Politics.)